Notes to and forming part of the consolidated financial
statements for the year ended 30 June 2010
Note 40. Share-based payments (continued)
The MD/CEO was not provided with upfront equity participation on his appointment and in accordance with his employment agreement any form of MTI or
LTI would not be granted until post 30 June 2010. In this regard, it was recognised that the MD/CEO would have no equity incentive exposure in his
remuneration until 15 months after his appointment and this reflects an inconsistency with shareholder interest alignment. Therefore, for FY 2009/10, a
portion (24.4 per cent) of the MD/CEO’s earned Total Incentive will be granted in MTI performance rights under similar terms to LTI grants to other Senior
Executives in September 2009 including performance measures with baseline of 30 June 2009. This ensures that in substance the MD/CEO is exposed to
the Company’s equity and also consistently aligned with his direct reports and other executives from a performance and reward perspective. The balance of
his MTI allocation for FY 2009/10 from his earned Total Incentive will be granted to him consistent with the allocation price for annual LTI grants and 30
June 2010 performance baseline.
(c) E mployee share plan (TranShare Plan)
A scheme, for which shares are acquired on-market on behalf of employees, was approved by shareholders at the 2004 annual general meeting. All
Australian and New Zealand permanent full time and part time employees (excluding executive Directors) are eligible to participate in the scheme.
Employees may elect not to participate in the scheme.
Under the scheme, eligible employees may be granted up to $1,000 worth of fully-paid ordinary shares in Transfield Services Limited annually, for
consideration of $900. The market value of shares acquired under the scheme, measured as the market price on the day of acquisition of the shares, is
recognised in the statement of financial position as share capital. The net shortfall of $100 per employee is expensed as part of the employee benefit costs
in the period the shares are acquired.
Shares acquired on market under the scheme may not be sold until the earlier of three years after acquisition or cessation of employment from the
respective Group company or joint venture. In all other respects the shares rank equally with other fully-paid ordinary shares on issue.
The number of shares acquired on behalf of participants in the scheme is the offer amount of $1,000 divided by the market price at which the Company’s
shares are traded on the Australian Securities Exchange on the day of acquisition on market.
2010 2009
$’000 $’000)
Shares acquired under the Plan to participating employees - 1901
1 Each participant was issued with shares worth $1,000 based on market prices of between $1.25 and $8.68.
Other conditions applicable to the scheme are identified in the remuneration report on page 62.
The acquisition of shares under the TranShare Plan was suspended on 19 May 2009 following changes to the equity plan taxation legislation.
(d) TSI F Notional Securities
The TSIF Notional Securities Scheme aims to provide a suitable long term incentive to executive employees who are fully seconded to TSI Fund by linking 50
per cent of their long term incentive to the outcomes of TSI Fund.
The incentive provided under the TSIF Notional Securities Scheme can be delivered either in cash or in TSI Fund Securities – to be purchased by Transfield
Services should the vesting conditions be met.
(e) E xpenses arising from share-based payment transactions
Total expenses before tax arising from share-based payment transactions recognised during the period as part of employee benefit expense were as
follows:
2010 2009
$’000 $’000)
Performance Awards expensed under TranShare Executive Performance Awards Plan 1,845 3,211
Short-term DRI’s granted 98 154
TSIF Notional Securites awarded (12) (45)
Shares under TranShare Plan acquired on market - 190
1,931 3,510